Former Visual Effects Employees Are Found Eligible for Trade Adjustment Assistance by the Department of Labor

News & Insights
May 28, 2015

The Employment and Training Administration of the Department of Labor today published in the Federal Register its decision, dated April 22, 2015, that former employees of Pixel Playground, Inc. in Woodland Hills, California are eligible to apply for worker adjustment assistance.  This decision reversed two earlier decisions by Labor that these employees were not eligible for trade adjustment assistance.

Pixel Playground’s employees produced visual effects for motion pictures, including Sony Imageworks’ 2012 film “The Amazing Spider-Man.”  Many employees at Pixel and other visual effects producers in the United States lost their jobs in recent years as massive subsidies have encouraged most Hollywood VFX production to move to Canada, the United Kingdom, and other jurisdictions.  As detailed in this report, visual effects and other post-production work (which can account for half or more of big-budget Hollywood movies) have largely moved outside the United States in the last few years, mostly to locations that offer huge incentives.  As a result, many highly skilled U.S. VFX workers have been forced to move abroad or to seek employment in other industries.

Although some of the employees who lost jobs at California VFX studios in recent years – including those at the Visual Effects Division of Sony Imageworks – were certified as eligible for trade adjustment assistance benefits in 2013, the former employees at Pixel were not.  One such Pixel employee, Hanna Reduto, filed a lawsuit in the U.S. Court of International Trade on behalf of all the former employees of Pixel challenging this decision.Represented by PKR lawyers, on a pro-bono basis, the employees agreed to dismiss their court challenge and Labor initiated a new investigation in 2014, but in December 2014 again denied eligibility.  PKR lawyers requested that Labor reconsider that decision, and earlier this year Labor agreed that PKR’s request was of “sufficient weight to justify reconsideration of the U.S. Department of Labor’s prior decision,” and then finally certified Pixel employees as eligible in the decision released today.

While a comprehensive solution to the rapid move of the U.S. visual effects industry to other countries, largely due to subsidies, remains elusive, the availability of trade adjustment assistance to provide financial support to former VFX workers as they transition to new careers can mitigate at least some of the harm.  While it took much longer than it should have for Pixel’s former employees to be certified as eligible, that certification has now finally arrived.  We commend Labor for recognizing that Pixel’s employees met the criteria for assistance, and especially Hanna and her former colleagues for not giving up and making sure they fought for the assistance that they were entitled to receive under the law.

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